Albany International Reports Third-Quarter Results

Albany International Reports Third-Quarter Results
Third-Quarter Financial Highlights
*Net sales were $183.1 million, a decrease of 5.9 percent compared to Q3
2012. Q3 2012 included a change in terms with a North American customer
that increased sales by $8 million.
*Adjusted EBITDA for Q3 2013 was $31.9 million, compared to $41.9 million
in Q3 2012 (see Tables 5 and 6). Q3 2012 included a change in terms with a
North American customer that increased Adjusted EBITDA by $3.5 million.
*Q3 2013 income from continuing operations was $0.15 per share. These
results include restructuring charges of $0.04, foreign currency
revaluation losses of $0.06, and net favorable income tax adjustments of
$0.01 (see Table 7).
*Q3 2012 income from continuing operations was $0.29 per share. These
results included restructuring charges of $0.05, foreign currency
revaluation losses of $0.07, and net unfavorable income tax adjustments of
$0.04 (see Table 8).
*Net debt at the end of Q3 was $94.9 million, a decline of $28.8 million
compared to the end of Q2.
Business Wire
ROCHESTER, N.H. -- November 4, 2013
Albany International Corp. (NYSE:AIN), a global advanced textiles and
materials processing company with core businesses in machine clothing and
engineered composites, reported Q3 2013 income from continuing operations of
$4.7 million. These results include restructuring charges of $2.3 million,
foreign currency revaluation losses of $3.3 million, and net favorable income
tax adjustments of $0.5 million (see Table 7).
Q3 2012 income from continuing operations was $9.1 million. These results
included restructuring charges of $2.7 million, foreign currency revaluation
losses of $3.6 million, and net unfavorable income tax adjustments of $1.3
million (see Table 8).
Table 1 summarizes net sales and the effect of changes in currency translation
rates:
Table 1
Impact of Percent
Net Sales Changes Change
Three Months ended in Currency excluding
September 30, Percent Translation Currency
(in 2013 2012 Change Rates Rate Effect
thousands)
Machine
Clothing $ 162,864 $ 177,471 -8.2 % $ 1,508 -9.1 %
(MC)
Engineered
Composites 20,283 17,118 18.5 % - 18.5 %
(AEC)
Total $ 183,147 $ 194,589 -5.9 % $ 1,508 -6.7 %
A change in contract terms with a North American Machine Clothing customer
resulted in an increase to Q3 2012 sales of $8 million. Excluding the effects
of this contract change and changes in currency translation rates, Q3 2013 MC
sales declined 4.8 percent and total Company sales declined 2.7 percent.
Q3 2013 gross profit was $68.0 million, or 37.1 percent of net sales, compared
to $79.7 million, or 40.9 percent of net sales, in the same period of 2012. MC
gross profit margin decreased from 44.6 percent in 2012 to 41.6 percent in
2013. The decrease in MC gross profit percentage was principally attributable
to an unfavorable change in geographic mix, lower sales, and a
more-severe-than-expected seasonal effect that resulted in production
ineffiencies.
Selling, technical, general, and research (STG&R) expenses were $52.5 million,
or 28.7 percent of net sales, in the third quarter of 2013, including losses
of $1.3 million related to the revaluation of non-functional-currency assets
and liabilities. In Q3 2013, Research expense increased by $0.7 million due to
scrap associated with an AEC research program. Q3 2013 expenses were lowered
by $1.5 million due to reduced U.S. medical costs, incentive compensation
accruals, and professional fees, all of which were reported in the Unallocated
expenses segment. In Q3 2012, STG&R expenses were $53.8 million, or 27.6
percent of net sales, including losses of $1.4 million related to the
revaluation of non-functional-currency assets and liabilities.
The following table summarizes third-quarter operating income:
Table 2
Operating Income/(loss)
Three Months ended
September 30,
(in thousands) 2013 2012
Machine Clothing $ 33,196 $ 44,918
Engineered Composites (572 ) (312 )
Research expenses (7,418 ) (6,734 )
Unallocated expenses (11,951 ) (14,760 )
Total $ 13,255 $ 23,112
Operating results were affected by restructuring and currency revaluation as
described below:
Table 3
Expenses in Q3 2013 Expenses in Q3 2012
resulting from resulting from
(in thousands) Restructuring Revaluation Restructuring Revaluation
Machine Clothing $ 2,250 $ 1,328 $ 2,739 $ 1,401
Engineered 6 - - 3
Composites
Unallocated - - - 2
expenses
Total $ 2,256 $ 1,328 $ 2,739 $ 1,406
Restructuring charges for Q3 2013 were principally due to adjustment to
accruals for severance and social costs associated with the Company’s Machine
Clothing production facilities in Sélestat and St. Junien, France.
Q3 2013 Other income/expense, net, was expense of $2.7 million, including
losses related to the revaluation of non-functional-currency intercompany
balances of $2.0 million and fees of $0.5 million associated with the creation
of Albany Safran Composites. Other income/expense, net, in Q3 2012 was expense
of $3.1 million, including losses of $2.2 million related to the revaluation
of non-functional-currency intercompany balances.
The following table summarizes currency revaluation effects on certain
financial metrics:
Table 4
Income/(loss) attributable
to currency revaluation
Three Months ended
September 30,
(in thousands) 2013 2012
Operating income ($1,328 ) ($1,406 )
Other income/(expense), net (1,975 ) (2,174 )
Total ($3,303 ) ($3,580 )
The Company’s income tax rate, excluding tax adjustments, was 41.0 percent for
Q3 2013, compared to 35.4 percent for the same period of 2012.The increase in
the estimated tax rate was primarily attributable to changes in the
anticipated amount and distribution of income and loss among the countries in
which we operate. Q3 2013 income tax expense included a charge of $0.2 million
for a change in the estimated income tax rate, and a benefit of $0.7 million
for discrete tax adjustments. Q3 2012 income tax expense included a charge of
$2.0 million for a change in the estimated income tax rate, and a benefit of
$0.7 million for discrete tax adjustments.
The following tables summarize Adjusted EBITDA:
Table 5
Three Months ended Research
September 30, 2013
Machine Engineered and Total
(in thousands) Clothing Composites Unallocated Company
Income from continuing $ 33,196 ($572 ) ($27,926 ) $ 4,698
operations
Interest expense, net - - 3,484 3,484
Income tax expense - - 2,381 2,381
Depreciation and 11,084 2,009 2,704 15,797
amortization
EBITDA 44,280 1,437 (19,357 ) 26,360
Restructuring and other, 2,250 6 - 2,256
net
Foreign currency 1,328 - 1,975 3,303
revaluation losses
Adjusted EBITDA $ 47,858 $ 1,443 ($17,382 ) $ 31,919
Table 6
Three Months ended Research
September 30, 2012
Machine Engineered and Total
(in thousands) Clothing Composites Unallocated Company
Income from continuing $ 44,918 ($312 ) ($35,525 ) $ 9,081
operations
Interest expense, net - - 3,997 3,997
Income tax expense - - 6,965 6,965
Depreciation and 11,469 1,471 2,606 15,546
amortization
EBITDA 56,387 1,159 (21,957 ) 35,589
Restructuring and other, 2,739 - - 2,739
net
Foreign currency 1,401 3 2,176 3,580
revaluation losses
Adjusted EBITDA $ 60,527 $ 1,162 ($19,781 ) $ 41,908
Capital spending for equipment and software was $19.1 million for Q3 2013,
bringing the year-to-date total to $47.6 million, including $30.3 million for
the Engineered Composites segment and its expansion associated with the LEAP
program. Depreciation and amortization was $15.8 million for Q3 2013.
CEO Comments
President and CEO Joe Morone said, “Q3 2013 was an encouraging quarter for
AEC, but a disappointing one for MC. The net result was weaker-than-expected
performance for the Company.
“The disappointing performance in MC was driven by soft sales. We had
anticipated a weak top line in Q3 because of summer slowdowns and the impact
of that Q3 2012 contractual change in treatment of inventory that we discussed
last quarter. The impact of the contract change on Q3 sales was in line with
our expectations, but the seasonal effect was more severe than we had
expected. The resulting underutilized capacity dragged our gross margins down
below their normal levels. Weaker-than-expected sales in Asia compounded the
problem. Even though our competitive position in Asia and particularly China
is, if anything, strengthening, sales were more than 10 percent behind Q3 2012
levels, as customer operating rates in both packaging and publication grades
remain soft.
“We expect to see an improvement in MC performance in Q4, but the results
could once again be held back by continuing softness in Asia, and a
stronger-than-normal seasonal effect at the end of the year if customers
perceive economic weakness and drive down their MC inventory. However, we do
not see Q3 results and the possibility of lingering softness in Q4 as an
indicator of longer term trends. Orders in Asia are strengthening and were 10
percent higher than Q3 2012 orders; sales and orders in Europe have been
stable; and if our customers in North America drive down their MC inventory at
the end of the year, they will likely restock early next year as long as the
economy holds. For these and other reasons, we expect a strong first half of
2014. More generally, the structural demand trends across the globe in the
paper industry, our overexposure to the growth segments of paper, our
continuing strength with the leading paper makers across the globe, and the
long-term growth potential of China and our strong competitive position there,
all suggest that this business continues to be a stable long-term generator of
EBITDA and cash flow, and that in 2014, Adjusted EBITDA and cash flow from MC
should be comparable to the levels we achieved in 2012, and were on track to
achieve this year until the softer-than-expected Q3.
“As for AEC, Q3 2013 was an encouraging quarter. Sales were strong, led again
by growth in the LEAP development effort, and EBITDA improved. We think these
trends should continue in Q4 and through next year and beyond. But more
important than these actual results are three developments of long-term
significance for this business. First, after successful tests earlier this
year that validated the performance of the LEAP fan module, the first full
LEAP engine was tested successfully and on schedule in early September. By all
accounts, this “first engine to test” went exceptionally well by normal
industry standards. Given the critical role that our parts play on the engine,
this was an important and high-profile demonstration of our technology and
capabilities. This first full engine test marks the beginning of a three-year
series of engine tests, which should culminate with certification, entry into
service, and production of the LEAP engine for the Airbus 320neo in the second
half of 2016, and for the Boeing 737 MAX in the second half of 2017.
“Second, we expect to complete the agreement with Safran to create Albany
Safran Composites (ASC) shortly. Several aspects of this agreement bear
repeating.
*First, it solidifies Albany’s position as the exclusive supplier of all 3D
woven parts for Safran;
*Second, the most important areas of application for ASC are likely to be
low- and high-temperature applications on Safran engines – from the LEAP
family, to smaller engines for business jets, to next-generation
turboprops for regional aircraft, to next-generation engines like the open
rotor, to parts for larger engine programs that Safran might participate
in. Safran engine nacelles, landing gear, and rocket motors are also
potential areas of application.
*Third, for applications outside of Safran interests – particularly on the
airframe, and in industries other than aerospace, like automotive – AEC is
free to apply its technology, including the intellectual property created
in support of and by ASC.
*Fourth, this agreement should lead to an expansion of our collaborative
R&D efforts into new areas of mutual interest for Albany and Safran, which
in turn should expand the still growing portfolio of potential
opportunities for growth beyond the LEAP fan module.
*And fifth, the agreement specifies the agreed-upon valuation of ASC, which
is set initially at $280 million and which grows over time with LEAP
production.
“Finally, several recent statements by CFM officials shed new light on the
timing and shape of the production ramp for LEAP. During Q1, I reported that,
while there was still some uncertainty, it appeared that AEC’s production of
LEAP components would be accelerated by about 12 months, with the ramp-up
beginning in 2015, and hitting a peak of 1,600 engines at the end of the
decade. This is of course still subject to change, but now it appears that
this acceleration will not occur and that the ramp will begin in 2016 as
originally expected. However, the ramp will be considerably steeper, reaching
higher production rates more quickly, hitting an annualized rate of 1,700
engines by the end of 2018 or early 2019, and possibly reaching 1,800 engines
by the end of the decade.
“This has several implications for AEC. First, I had said in Q1 that with a
2015 ramp start for LEAP, total AEC revenue potential of $120 million was in
reach for 2015. With a 2016 ramp start for LEAP, the earliest we can expect to
hit a $120 million AEC run rate will be in the second half of 2016. Second,
once the production ramp begins, our revenue will grow faster and to higher
levels than we had been anticipating. And third, we have been estimating that
total CAPEX for the Company would average $70 million per year through 2016,
with above-average spending in 2015 and 2016. With a 2016 ramp start, an
average of $50-$55 million for 2014 through 2016, growing back to that $70
million average for the balance of the decade, now seems more realistic.
“In sum, strong seasonal effects and weakness in Asia led to a disappointing
Q3 in Machine Clothing. We expect a rebound in Q4 and a strong first half of
2014, although the rebound in Q4 could be muted by continued weakness in Asia
and a rundown of MC inventory by our customers at the end of the year.
Meanwhile, for AEC, CFM conducted a very successful first full test of the
LEAP engine; the launch of ASC is imminent; and, while the trigger point for
the LEAP ramp now appears to be in 2016, the ramp itself is likely to be
steeper and to reach higher levels sooner than we had been anticipating.”
CFO Comments
CFO and Treasurer John Cozzolino commented, “Q3 was a solid quarter for cash
flow as net debt declined approximately $29 million as compared to Q2 (see
Table 9). Part of the improvement in net debt was due to the receipt of the
remaining $13 million of proceeds from the sale of Albany Door Systems. As
expected, however, capital expenditures were high during the quarter with a
total cash outflow of about $19 million. Cash reserves and available borrowing
capacity continued to be significant at the end of Q3. Cash balances, mostly
held outside of the U.S., totaled about $213 million, and $178 million was
available on our $330 million credit facility.
“The Company recorded $2 million in restructuring charges in Q3 for severance
and social costs related to Machine Clothing production facilities in France,
bringing the year-to-date total to $26 million. The Company continues to
expect $4-$6 million of additional charges related to training, outplacement,
and other benefits to be incurred over the next several quarters. Cash
outflows related to the restructuring charges were about $2 million during Q3.
The remaining cash outflows for all French restructuring charges are expected
to mostly occur in Q4 and throughout 2014.
“Revaluation of non-functional-currency assets and liabilities generated a
total loss of $3 million in Q3. This loss was primarily due to the revaluation
of intercompany loans, U.S. dollar cash holdings and trade receivables to the
euro and other currencies.
“The Company’s income tax rate in Q3, exclusive of tax adjustments, was 41
percent, representing the Company’s current estimate of the full-year 2013 tax
rate. This current tax rate forecast is a slight increase from the Q2 estimate
of 39 percent and is mostly due to a change in the expected full-year
geographic distribution of pre-tax income. Including payments related to tax
audit activities, cash paid for income taxes through Q3 2013 was about $21
million, and is expected to total $27 million in 2013.”
The Company plans a webcast to discuss third-quarter 2013 financial results on
Tuesday, November 5, 2013, at 9:00 a.m. Eastern Time. For access, go to
www.albint.com.
# # #
About Albany International Corp.
Albany International is a global advanced textiles and materials processing
company, with two core businesses. Machine Clothing is the world’s leading
producer of custom-designed fabrics and belts essential to production in the
paper, nonwovens, and other process industries. Albany Engineered Composites
is a rapidly growing supplier of highly engineered composite parts for the
aerospace industry. Albany International is headquartered in Rochester, New
Hampshire, operates 19 plants in 11 countries, employs 4,000 people worldwide,
and is listed on the New York Stock Exchange (Symbol AIN). Additional
information about the Company and its products and services can be found at
www.albint.com.
This release contains certain items, such as earnings before interest, taxes,
depreciation and amortization (EBITDA), EBITDA, Adjusted EBITDA, sales
excluding currency effects, income tax rate exclusive of income tax
adjustments, net debt, and certain income and expense items on a per share
basis that could be considered non-GAAP financial measures. Such items are
provided because management believes that, when presented together with the
GAAP items to which they relate, they provide additional useful information to
investors regarding the Company’s operational performance. Presenting
increases or decreases in sales, after currency effects are excluded, can give
management and investors insight into underlying sales trends. An
understanding of the impact in a particular quarter of specific restructuring
costs, or other gains and losses, on operating income or EBITDA can give
management and investors additional insight into quarterly performance,
especially when compared to quarters in which such items had a greater or
lesser effect, or no effect. All non-GAAP financial measures in this release
relate to the Company’s continuing operations.
The effect of changes in currency translation rates is calculated by
converting amounts reported in local currencies into U.S. dollars at the
exchange rate of a prior period. That amount is then compared to the U.S.
dollar amount reported in the current period. The Company calculates Income
tax adjustments by adding discrete tax items to the effect of a change in tax
rate for the reporting period. The Company calculates its Income tax rate,
exclusive of Income tax adjustments, by removing Income tax adjustments from
total Income tax expense, then dividing that result by Income before tax. The
Company calculates EBITDA by adding Interest expense net, Income taxes, and
Depreciation and Amortization to Income from Continuing Operations. Adjusted
EBITDA is calculated by adding to EBITDA, costs associated with restructuring
and pension settlement charges, and then adding or subtracting revaluation
losses or gains and subtracting building sale gains. The Company believes that
EBITDA and Adjusted EBITDA provide useful information to investors because
they provide an indication of the strength and performance of the Company's
ongoing business operations, including its ability to fund discretionary
spending such as capital expenditures and strategic investments, as well as
its ability to incur and service debt. While depreciation and amortization are
operating costs under GAAP, they are non-cash expenses equal to current period
allocation of costs associated with capital and other long-lived investments
made in prior periods. While restructuring expenses, foreign currency
revaluation losses or gains, pension settlement charges, and building sale
gains have an impact on the Company's net income, removing them from EBITDA
can provide, in the opinion of the Company, a better measure of operating
performance. EBITDA is also a calculation commonly used by investors and
analysts to evaluate and compare the periodic and future operating performance
and value of companies. EBITDA, as defined by the Company, may not be similar
to EBITDA measures of other companies. Such EBITDA measures may not be
considered measurements under GAAP, and should be considered in addition to,
but not as substitutes for, the information contained in the Company’s
statements of income.
The Company discloses certain income and expense items on a per share basis.
The Company believes that such disclosures provide important insight into
underlying quarterly earnings and are financial performance metrics commonly
used by investors. The Company calculates the per share amount for items
included in continuing operations by using the effective tax rate utilized for
the most recent reporting period, the full-year tax rate for the comparable
period of the prior year, and the weighted average number of shares
outstanding for each period.
Table 7
Quarter ended September 30, 2013
Pre-tax After-tax Shares Per Share
(in thousands,
except per amounts Tax Effect Effect Outstanding Effect
share amounts)
Restructuring $ 2,256 $ 925 $ 1,331 31,719 $ 0.04
and other, net
Foreign
currency 3,303 1,354 1,949 31,719 0.06
revaluation
losses
Negative effect
of change in - 170 170 31,719 0.01
estimated
income tax rate
Net discrete
income tax - 691 691 31,719 0.02
benefit
Table 8
Quarter ended September 30, 2012
Pre-tax After-tax Shares Per Share
(in thousands,
except per amounts Tax Effect Effect Outstanding Effect
share amounts)
Restructuring $ 2,739 $ 1,055 $ 1,684 31,363 $ 0.05
and other, net
Foreign
currency 3,580 1,378 2,202 31,363 0.07
revaluation
losses
Negative effect
of change in - 1,968 1,968 31,363 0.06
estimated tax
rate
Net discrete
income tax - 684 684 31,363 0.02
benefit
The following table contains the calculation of net debt:
Table 9
September 30, June 30, December 31,
(in thousands) 2013 2013 2012
Notes and loans payable $ 565 $ 610 $ 586
Current maturities of long-term 55,014 55,014 83,276
debt
Long-term debt 252,115 265,368 235,877
Total debt 307,694 320,992 319,739
Cash 212,809 197,321 190,718
Net debt $ 94,885 $ 123,671 $ 129,021
The following tables summarize year-to-date Adjusted EBITDA:
Table 10
Nine Months ended Research
September 30, 2013
Machine Engineered and Total
(in thousands) Clothing Composites Unallocated Company
Income from $ 96,803 ($4,460 ) ($83,162 ) $ 9,181
continuing operations
Interest expense, net - - 11,056 11,056
Income tax expense - - 6,386 6,386
Depreciation and 34,123 5,585 8,044 47,752
amortization
EBITDA 130,926 1,125 (57,676 ) 74,375
Restructuring and 26,673 540 - 27,213
other, net
Foreign currency 133 - 3,882 4,015
revaluation losses
Gain on sale of
former manufacturing - - (3,763 ) (3,763 )
facility
Adjusted EBITDA $ 157,732 $ 1,665 ($57,557 ) $ 101,840
Table 11
Nine Months ended Research
September 30, 2012
Machine Engineered and Total
(in thousands) Clothing Composites Unallocated Company
Income/(loss) from $ 120,760 ($653 ) ($168,930 ) ($48,823 )
continuing operations
Interest expense, net - - 12,610 12,610
Income tax - - (32,650 ) (32,650 )
expense/(benefit)
Depreciation and 35,267 4,325 7,741 47,333
amortization
EBITDA 156,027 3,672 (181,229 ) (21,530 )
Restructuring and 6,315 - (166 ) 6,149
other, net
Foreign currency 446 3 2,884 3,333
revaluation losses
Pension plan - - 119,735 119,735
settlement charges
Adjusted EBITDA $ 162,788 $ 3,675 ($58,776 ) $ 107,687
This press release may contain statements, estimates, or projections that
constitute “forward-looking statements” as defined under U.S. federal
securities laws. Generally, the words “believe,” “expect,” “intend,”
“estimate,” “anticipate,” “project,” “will,” “should” and similar expressions
identify forward-looking statements, which generally are not historical in
nature. Forward-looking statements are subject to certain risks and
uncertainties (including, without limitation, those set forth in the Company’s
most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q) that
could cause actual results to differ materially from the Company’s historical
experience and our present expectations or projections.
Forward-looking statements in this release or in the webcast include, without
limitation, statements about economic and paper industry trends and conditions
during 2013 and in future years; sales, EBITDA, Adjusted EBITDA and operating
income expectations in 2013 and in future periods in each of the Company’s
businesses and for the Company as a whole; the timing and impact of production
and development programs in the Company’s AEC business segment and AEC sales
growth potential; the amount and timing of capital expenditures, future tax
rates and cash paid for taxes, depreciation and amortization; the amount and
timing of charges related to announced restructuring activities; future debt
levels and debt covenant ratios; and future revaluation gains and losses.
Furthermore, a change in any one or more of the foregoing factors could have a
material effect on the Company’s financial results in any period. Such
statements are based on current expectations, and the Company undertakes no
obligation to publicly update or revise any forward-looking statements.
Statements expressing management’s assessments of the growth potential of its
businesses, or referring to earlier assessments of such potential, are not
intended as forecasts of actual future growth, and should not be relied on as
such. While management believes such assessments to have a reasonable basis,
such assessments are, by their nature, inherently uncertain. This release and
earlier releases set forth a number of assumptions regarding these
assessments, including historical results, independent forecasts regarding the
markets in which these businesses operate, and the timing and magnitude of
orders for our customers’ products. Historical growth rates are no guarantee
of future growth, and such independent forecasts and assumptions could prove
materially incorrect, in some cases.
ALBANY INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2013 2012 2013 2012
$ 183,147 $ 194,589 Net sales $ 567,775 $ 566,606
115,146 114,938 Cost of goods sold 349,572 340,169
68,001 79,651 Gross profit 218,203 226,437
Selling, general, and
39,143 41,166 administrative 117,690 125,335
expenses
Technical, product
13,347 12,634 engineering, and 41,040 39,019
research expenses
2,256 2,739 Restructuring and 27,213 6,149
other, net
- - Pension settlement - 119,735
expense
13,255 23,112 Operating 32,260 (63,801 )
income/(loss)
3,484 3,997 Interest expense, net 11,056 12,610
2,692 3,069 Other 5,637 5,062
expense/(income), net
7,079 16,046 Income/(loss) before 15,567 (81,473 )
income taxes
2,381 6,965 Income tax 6,386 (32,650 )
expense/(benefit)
4,698 9,081 Income/(loss) from 9,181 (48,823 )
continuing operations
(Loss)/income from
- - operations of (575 ) 4,776
discontinued business
- (301 ) Gain/(loss) on sale of - 92,376
discontinued business
Income tax
- (683 ) (benefit)/expense on (224 ) 25,570
discontinued
operations
(Loss)/income from
- 382 discontinued (351 ) 71,582
operations
$ 4,698 $ 9,463 Net income $ 8,830 $ 22,759
Earnings per share -
Basic
$ 0.15 $ 0.29 Income/(loss) from $ 0.29 ($1.56 )
continuing operations
0.00 0.01 Discontinued (0.01 ) 2.29
operations
$ 0.15 $ 0.30 Net income $ 0.28 $ 0.73
Earnings per share -
Diluted
$ 0.15 $ 0.29 Income/(loss) from $ 0.29 ($1.55 )
continuing operations
0.00 0.01 Discontinued (0.01 ) 2.27
operations
$ 0.15 $ 0.30 Net income $ 0.28 $ 0.72
Shares used in
computing earnings per
share:
31,719 31,363 Basic 31,615 31,340
32,010 31,550 Diluted 31,913 31,550
$ 0.15 $ 0.14 Dividends per share $ 0.44 $ 0.41
ALBANY INTERNATIONAL CORP.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
September 30, December 31,
2013 2012
ASSETS
Cash and cash equivalents $ 212,809 $ 190,718
Accounts receivable, net 158,793 171,535
Inventories 118,955 119,183
Income taxes receivable and deferred 20,156 20,594
Prepaid expenses and other current assets 12,019 10,435
Total current assets 522,732 512,465
Property, plant and equipment, net 416,446 420,154
Intangibles 674 848
Goodwill 77,950 76,522
Deferred taxes 118,334 123,886
Other assets 28,149 22,822
Total assets $ 1,164,285 $ 1,156,697
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes and loans payable $ 565 $ 586
Accounts payable 39,161 35,117
Accrued liabilities 136,874 103,257
Current maturities of long-term debt 55,014 83,276
Income taxes payable and deferred 3,293 13,552
Total current liabilities 234,907 235,788
Long-term debt 252,115 235,877
Other noncurrent liabilities 110,048 136,012
Deferred taxes and other credits 52,998 55,509
Total liabilities 650,068 663,186
SHAREHOLDERS' EQUITY
Preferred stock, par value $5.00 per share; - -
authorized 2,000,000 shares; none issued
Class A Common Stock, par value $.001 per
share; authorized 100,000,000 shares; issued 37 37
36,954,027 in 2013 and 36,642,204 in 2012
Class B Common Stock, par value $.001 per
share; authorized 25,000,000 shares; issued 3 3
and outstanding 3,236,098 in 2013 and 2012
Additional paid in capital 399,973 395,381
Retained earnings 430,676 435,775
Accumulated items of other comprehensive
income:
Translation adjustments (3,661 ) (7,659 )
Pension and postretirement liability (53,871 ) (69,484 )
adjustments
Derivative valuation adjustment (1,369 ) (2,878 )
Treasury stock (Class A), at cost 8,463,635 (257,571 ) (257,664 )
shares in 2013 and 8,467,873 in 2012
Total shareholders' equity 514,217 493,511
Total liabilities and shareholders' equity $ 1,164,285 $ 1,156,697
ALBANY INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOW
(in thousands)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2013 2012 2013 2012
OPERATING ACTIVITIES
$ 4,698 $ 9,463 Net income $ 8,830 $ 22,759
Adjustments to
reconcile net income
to net cash provided
by /(used in)
operating activities:
14,230 13,953 Depreciation 42,868 42,638
1,567 1,593 Amortization 4,884 4,862
- 210 Noncash interest - 824
expense
Change in long-term
(283 ) (1,362 ) liabilities, deferred (4,274 ) (126,606 )
taxes and other
credits
Write-off of pension
- - liability adjustment - 118,350
due to settlement
Provision for
264 - write-off of 329 200
property, plant and
equipment
- 301 Loss/(gain) on (3,763 ) (92,376 )
disposition of assets
(420 ) (26 ) Excess tax benefit of (944 ) (37 )
options exercised
Compensation and
287 392 benefits paid or (887 ) 1,795
payable in Class A
Common Stock
Changes in operating
assets and
liabilities, net of
business
divestitures:
5,759 3,655 Accounts receivable (479 ) (6,870 )
290 8,505 Inventories (240 ) 8,376
327 746 Prepaid expenses and (1,706 ) (251 )
other current assets
129 2,840 Income taxes prepaid 309 10,232
and receivable
4,516 (4,216 ) Accounts payable 3,924 (4,241 )
4,076 5,707 Accrued liabilities 25,005 13,071
(4,101 ) 1,768 Income taxes payable (8,978 ) (762 )
(593 ) (359 ) Other, net (1,824 ) (2,242 )
Net cash provided
30,746 43,170 by/(used in) 63,054 (10,278 )
operating activities
INVESTING ACTIVITIES
Purchases of
(18,378 ) (11,047 ) property, plant and (46,186 ) (25,237 )
equipment
(728 ) (146 ) Purchased software (1,376 ) (154 )
- - Proceeds from sale of 6,268 -
assets
Proceeds from sale of
13,000 - discontinued 13,000 150,654
operations, net of
expenses
Net cash (used
(6,106 ) (11,193 ) in)/provided by (28,294 ) 125,263
investing activities
FINANCING ACTIVITIES
5,271 7,000 Proceeds from 57,176 45,164
borrowings
(18,562 ) (29,131 ) Principal payments on (69,221 ) (98,354 )
debt
1,661 811 Proceeds from options 4,629 1,079
exercised
420 26 Excess tax benefit of 944 37
options exercised
- - Debt acquisition (1,639 ) -
costs
(4,747 ) (4,390 ) Dividends paid (9,170 ) (12,528 )
Net cash (used
(15,957 ) (25,684 ) in)/provided by (17,281 ) (64,602 )
financing activities
Effect of exchange
6,805 3,054 rate changes on cash 4,612 4,647
and cash equivalents
Increase/(decrease)
15,488 9,347 in cash and cash 22,091 55,030
equivalents
Cash and cash
197,321 164,592 equivalents at 190,718 118,909
beginning of period
Cash and cash
$ 212,809 $ 173,939 equivalents at end of $ 212,809 $ 173,939
period
Contact:
Albany International Corp.
Investors:
John Cozzolino, 518-445-2281
john.cozzolino@albint.com
or
Media:
Susan Siegel, 603-330-5866
susan.siegel@albint.com